Does anyone have any experience of changing property ownership into joint names to take better advantage of the valuaiton discounts mentioned in the HMRC manual? Client’s value is £1.5m (mainly in property). The son has suggested purchasing a fraction of each of his mother’s properites to get them into joint names now to reduce future IHT. This would be at full market value, but as it would be a very small percentage share, no CGT or SDLT would be triggered. I wonder how this would be viewed by HMRC and if there is a minium percentage share that HMRC would expect the ‘smaller’ owner to have, ideally say 1%? (or could it be even less than 1% - eg 0.5% ?), Thanks for any thoughts on this.
A very interesting ‘planning’ query. If it was put another way, namely that "a property is jointly owned between H and W and S, with S only owning 1%, does a joint ownership discount apply? My immediate thought would be that a valuation discount would apply. The concern here is that it seens to be artificially arranged, do you then get caught under GAAR or some other anit-avoidance terms? It may well be that the even on a ‘open market sale’, a loss to to the estate principle will apply, particularly if the said S is the ultimate beneficiary.